Agreed, this is an enormous issue. After playing in the HUD Layout settings it's a little more bearable, but the NPC dialogue is unreadable unless I'm a foot away from my TV.

As others have stated you can increase the font size of the chat box. Not many people know this but you can also resize it -- turn on the virtual mouse (L1 + R3) and you'll see the resize icon in the top right corner of the chat box. Drag that to resize.